Derivative securities - a chance for everyone

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2018-03-27 00:10:07

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Many citizens of our vast country and other countries of the former Soviet Union after the collapse of the latter had the opportunity to conduct their own Affairs. Most rushed into the sale, because, at that time, it really is a fast method of super-profits. A separate contingent decided to invest in manufacturing for the long term profit. And only a few drew attention to international markets, including the stock. Today, this situation is largely changed due to, of course, the development of the Internet. However, many rush to make deals, not even having the minimum knowledge in this area.

Many people can hardly imagine, what is the difference between primary and derivative securities, why they are needed and what role perform. If in matters of fixed assets clarity is still present, with the derivative problems, but they for the experienced player in the stock market are often more interesting than the underlying assets. Initially, it is worth noting the fact that derivative securities tend to be more flexible, if you want a versatile tool in the stock market.

 

Properties

First of all, it should be noted that domestic securities (derivatives) have a price, which is in all respects tied to the price of the underlying asset. Second, the acquisition of such financial instruments as derivative securities, by their definition, do not require upfront investment of significant capital to obtain a profit commensurate in scope with the main papers. Finally, this kind of paper are extremely urgent.

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A Little history

It is Worth noting that the market, which shows primary and derivative securities, is, of course, an integral part of the entire world market in a global sense. Despite its 150-year history of derivative securities to the 70 years of the 20th century virtually not carrying any significant role in the formation of financial flows. Impetus to the active development of this market was a General liberalization of the world economy in General and financial system in particular, and not the last role in this aspect is played by the formation of floating exchange rates. In addition, if the derivatives market was purely stock, current economic conditions, it is already developing in two directions, including out to the area of the OTC securities market. This fact largely contributes to capacity building, including in the field of insurance risks. Of course, could not affect the development of the market, representing domestic securities over the last 10 years a 20-fold increase in the volume of transactions at the standard, basic securities.

 

Prospects of development

As in other grow activities of mankind great, hardly any critical role played by the process of globalization, in the sense that more and more players appear on the market, ready to work with such financial instruments as derivative securities. In addition, according to analysts and experts will continue serious dominance in the future interest contracts, such as options and futures, especially for government bonds.

In conclusion, it should be noted that derivatives are inherently attractive, primarily to private investors. The reason for this is quite simple – low investment and relatively high returns compared to other financial instruments that gives you the opportunity to try their hand at gambling, even the common man, given the development of the Internet.


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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